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Union Pacific Corp (NYSE:UNP)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Union Pacific Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

UNP' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 8

3
9

During the past 13 years, the highest Piotroski F-Score of Union Pacific Corp was 9. The lowest was 3. And the median was 7.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 1291 + 1088 + 1174 + 1151 = $4,704 Mil.
Cash Flow from Operations was 1454 + 1767 + 1942 + 1663 = $6,826 Mil.
Revenue was 6015 + 5638 + 5630 + 5573 = $22,856 Mil.
Gross Profit was 4140 + 3798 + 3829 + 3810 = $15,577 Mil.
Total Assets at the begining of this year (Jun13) was $49,026 Mil.
Total Assets was $51,562 Mil.
Long-Term Debt was $10,385 Mil.
Total Current Assets was $4,503 Mil.
Total Current Liabilities was $3,777 Mil.
Net Income was 1106 + 957 + 1036 + 1042 = $4,141 Mil.

Revenue was 5470 + 5290 + 5250 + 5343 = $21,353 Mil.
Gross Profit was 3720 + 3520 + 3495 + 3621 = $14,356 Mil.
Total Assets at the begining of last year (Jun12) was $46,374 Mil.
Total Assets was $49,026 Mil.
Long-Term Debt was $9,076 Mil.
Total Current Assets was $4,543 Mil.
Total Current Liabilities was $3,825 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Union Pacific Corp's current net income was 4,704. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Union Pacific Corp's current cash flow from operations was 6,826. ==> Positive ==> Score 1.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income/Total Assets at the beginning of this year (Jun13)
=4704/49026
=0.09594909

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=4141/46374
=0.08929573

Union Pacific Corp's return on assets of this year was 0.09594909. Union Pacific Corp's return on assets of last year was 0.08929573. ==> This year is higher. ==> Score 1.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA =< ROA.

Union Pacific Corp's current net income was 4,704. Union Pacific Corp's current cash flow from operations was 6,826. ==> 6,826 > 4,704 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year)=Long-Term Debt/Total Assets
=10385/51562
=0.20140801

Gearing (Last Year)=Long-Term Debt/Total Assets
=9076/49026
=0.18512626

Union Pacific Corp's gearing of this year was 0.20140801. Union Pacific Corp's gearing of last year was 0.18512626. ==> Last year is lower than this year ==> Score 0.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year)=Total Current Assets/Total Current Liabilities
=4503/3777
=1.19221604

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=4543/3825
=1.18771242

Union Pacific Corp's current ratio of this year was 1.19221604. Union Pacific Corp's current ratio of last year was 1.18771242. ==> This year's current ratio is higher. ==> Score 1.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Union Pacific Corp's number of shares in issue this year was 905. Union Pacific Corp's number of shares in issue last year was 935.3. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year)=Gross Profit/Revenue
=15577/22856
=0.68152783

Gross Margin (Last Year)=Gross Profit/Revenue
=14356/21353
=0.67231771

Union Pacific Corp's gross margin of this year was 0.68152783. Union Pacific Corp's gross margin of last year was 0.67231771. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue/Total Assets at the beginning of this year (Jun13)
=22856/49026
=0.46620161

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=21353/46374
=0.46045198

Union Pacific Corp's asset turnover of this year was 0.46620161. Union Pacific Corp's asset turnover of last year was 0.46045198. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+1+1+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Union Pacific Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Union Pacific Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 0111101111
Q4 1111111111
Q5 1110001111
Q6 1001110010
Q7 1001111111
Q8 0011011011
Q9 1111101111
F-score 7678768798

Union Pacific Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1111111111
Q4 1111111111
Q5 1111011110
Q6 0001111001
Q7 1111111111
Q8 0111100001
Q9 1111100101
F-score 7889877768
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